2014 Tribal Webinar Series Net Metering

1. 2014 Tribal Webinar Series Net Metering June 25, 2014 11:00 am – 12:30 PM

2. Todays Presenters • Randy Manion manion@wapa.gov • Sarai Geary Sarai.Geary@Hq.Doe.Gov • Lori Bird lori.bird@nrel.gov • Patrick McCulley Patrick@blackrocksolar.org • Lenny Gold lgold@utility-strategies.com • Susie Chang schang@gridalternatives.org

3. Net Metering Overview for Tribes Lori Bird, NREL June 25, 2014 Webinar

4. Net Metering Definition For electric customers who generate their own electricity, net metering allows for the flow of electricity both to and from the customer – typically through a single, bi-directional meter. When a customer’s generation exceeds the customer’s use, electricity from the customer flows back to the grid, offsetting electricity consumed by the customer at a different time during the same billing cycle. In effect, the customer uses excess generation to offset electricity that the customer otherwise would have to purchase at the utility’s full retail rate. Source: Database of State Incentives for Renewables & Efficiency (DSIRE) - http://www.dsireusa.org/glossary/

5. Net Metering Policy Summary • PV project capacity limits range from 10 kW to 80 MW • Half of all policies have a cap on aggregate eligible net metering capacity

7. Net Metering Design Components Design Considerations • Eligibility • Allowable technology • Customer type • System size limitations • Limits on size of eligible residential and commercial systems • Is oversizing of systems allowed? • Period of crediting • Monthly, annual, or continuous crediting • Crediting of net excess generation • Retail or wholesale rate • Cap on aggregate net metered capacity • Additional fees (if any) • Renewable Energy Credit (REC) ownership

8. Example Net Metering Programs Colorado New Jersey • Net Excess Generation: • Rolls month to month • IOUs: Customers can roll over credit indefinitely or receive payment at average hourly incremental cost at end of year • Municipality and co-ops: annual reconciliation at a rate they deem appropriate • System Capacity Limit: • IOU customers: 120% of the customer's average annual consumption. • Municipality and co-op customers: 25 kW for non-residential; 10 kW for residential • Aggregate Capacity Limit: • No limit specified • Net Excess Generation: • Rolls month to month; excess reconciled annually at avoided-cost rate • System Capacity Limit: • Capacity equivalent to serve customer's annual on-site energy consumption • Aggregate Capacity Limit: • No limit specified (Board of Public Utilities may limit to 2.5% of peak demand)

9. DSIRE - Net Metering Information for Coloradohttp://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=CO26R&re=1&ee=0

10. Meter Aggregation and Virtual Net Metering Meter aggregation - a renewable energy project can offset the electricity load of a customer with multiple meters • Example: A solar project at a federal site offsets the loads of buildings that are separately metered Virtual net metering/group billing – multiple customers receive benefits of a net-metered renewable energy (RE) project, with resulting bill credits allocated across the participating customer bills. • Examples: Multiple stores in a shopping mall receive benefits from solar project on the mall roof • Community solar project with net metering

11. Meter Aggregation and Virtual Net Metering Programs • Available in a number of states • Example: California, Colorado, Delaware, Massachusetts & Vermont • Virtual net metering/group billing • Vermont: 22 groups have formed to share the output of a renewable energy system with system sizes ranging from 1.5 to 199 kW • California Meter Aggregation: • Virtual net metering allowed for multi-tenant properties • Meter aggregation allowed for local governments if all participating accounts receive a time-of-use rate • Meter aggregation may be allowed for all customers with multiple meters on parcels of land contiguous to the location of the renewable energy system (pending CPUC and other approvals) NREL report: http://www.nrel.gov/docs/fy12osti/54570.pdf

12. Net Metering Aggregate Caps Most net metering caps are based on peak demand but there is variation in cap design. In some cases there is a trigger to notify the PUC once a threshold is reached.

13. Progress to Meeting Net Metering Caps NJ: trigger, not cap Cap often defined as fraction of utility peak demand (e.g., 1-5%). Some states have triggers where they can review net metering Source: Data from individual states or utilities. Data updated as of March 11, 2014. Percentages represent the latest data available at the time of data collection.

14. Net Metering Legislative Activity 2013-2014 Enacted Legislation 43 States + DC have Net Metering Is retail rate compensation accurate for PV customers? Or is it too high or too low? Eligibility is often capped to limit financial impacts. Source: Advanced Energy Legislation Tracker and National Conference of State Legislatures as of 3/26/14.

15. Net Metering Debate and Rate Options Net metering debate • Residential customers avoid paying transmission and distribution charges with retail rate credit (no demand charge); potential cost shift • What is the appropriate rate for crediting solar generation? A variety of options exist for regulators to address distributed PV and may be used in combination • Net metering (43 states) • Two-way rates • e.g., value of solar • Customer charges • fixed charges, demand charges, minimum bill • Time-based rates Source: Dennis Schroeder

16. What is the Value of Distributed PV? Benefits Source: Rocky Mountain Institute, Review of Solar PV Benefit and Cost Studies, 2013 • Generation and capacity value • T&D deferrals • Line loss savings • Fuel price hedge • Environmental benefit Costs • Administrative costs • Interconnection costs • Integration costs

17. Value of Solar Tariffs vs. Net Metering Value of Solar (VOS) Net Metering • Applied to all PV system generation • Payment based on value of PV • Customer consumption and VOS revenues may be netted on the utility bill • Unused PV generation reduces consumption charges (retail rate credit) • Net excess generation compensated at some rate • Netting on customer bill, although net excess can be paid separately • Examples: • Austin Energy • Minnesota • CPS Energy Credit: Craig Miller Productions and DOE

18. Value of Solar Tariff Considerations • Challenge in gaining consensus on calculating the value • What benefits/costs to include? • What methodology? • Customer continues paying fully embedded rates • If calculation changes frequently, it can create uncertainty for solar development • If VOS tariff rate is below LCOE of solar, then the market could stagnate or other incentives may be needed • Two-way rate could have tax implications

19. Thank you. Lori Bird Lori.bird@nrel.gov Net Metering Overview for Tribes June 25, 2014

20. Questions • Answers to all questions submitted electronically during today’s webinar will be posted on WAPA’s website within a few weeks. • To view and download presentations and corresponding Q&As from the 2014 Tribal Energy Webinar Series, please visit www.wapa.gov and click on Renewables in the top navigation. • To submit follow-up questions regarding the material covered in today’s webinar, please email the appropriate presenter

21. Remaining Webinars in the 2014 Series